High Court considers removal of restrictive covenant

In Cumerlong Holdings Pty Ltd v Dalcross Properties Pty Ltd [2011] HCA 27, the Court considered a NSW planning ordinance which had the intended effect of suspending a restrictive covenant that existed in favour of the Appellant. The removal of the covenant occurred by way of an amendment to a Schedule to the planning ordinance. The Court identified the following issues of general application:

“This dispute illustrates several points of general significance. It may be true to say that State planning legislation “is concerned with land as a topographical entity, indifferently to its proprietorship”, and that this may entail interference with private property rights. But legislation which operates to mitigate the extent of that interference, by prescription of a particular manner and form for the making of planning instruments, should be read in light of that purpose of mitigating the derogation of private rights”. (footnotes omitted)

In its reasons, the Court confirms that proprietary rights cannot be interfered with unless there has been strict compliance with statute. In this case the Appellant argued that the amendment to the Schedule had not been approved by the Governor in Council as required by the New South Wales Environment Planning and Assessment Act 1979. The effect of the case is to confirm the existence of a restrictive covenant in favour of the Appellant and prevent the expansion of a private hospital.

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